Economic history of Iran

Economic history of Iran - Wikipedia, the free encyclopedia a:lang(ar),a:lang(ckb),a:lang(fa),a:lang(kk-arab),a:lang(mzn),a:lang(ps),a:lang(ur){text-decoration:none}a.new,#quickbar a.new{color:#ba0000} /* cache key: enwiki:resourceloader:filter:minify-css:4:c88e2bcd56513749bec09a7e29cb3ffa */ if ( window.mediaWiki ) { mw.config.set({"wgCanonicalNamespace": "", "wgCanonicalSpecialPageName": false, "wgNamespaceNumber": 0, "wgPageName": "Economic_history_of_Iran", "wgTitle": "Economic history of Iran", "wgCurRevisionId": 454566245, "wgArticleId": 23792421, "wgIsArticle": true, "wgAction": "view", "wgUserName": null, "wgUserGroups": ["*"], "wgCategories": ["All articles with dead external links", "Articles with dead external links from October 2010", "Economic history of Iran", "History of Iran", "Economy of Iran"], "wgBreakFrames": false, "wgRestrictionEdit": [], "wgRestrictionMove": [], "wgSearchNamespaces": [0], "wgFlaggedRevsParams": {"tags": {"status": {"levels": 1, "quality": 2, "pristine": 3}}}, "wgStableRevisionId": null, "wgVectorEnabledModules": {"collapsiblenav": true, "collapsibletabs": true, "editwarning": true, "expandablesearch": false, "footercleanup": false, "sectioneditlinks": false, "simplesearch": true, "experiments": true}, "wgWikiEditorEnabledModules": {"toolbar": true, "dialogs": true, "hidesig": true, "templateEditor": false, "templates": false, "preview": false, "previewDialog": false, "publish": false, "toc": false}, "wgTrackingToken": "b002612ecf7c4200aa04bd69180e39b9", "wikilove-recipient": "", "wikilove-edittoken": "+\\", "wikilove-anon": 0, "mbEditToken": "+\\", "Geo": {"city": "", "country": ""}, "wgNoticeProject": "wikipedia"}); } if ( window.mediaWiki ) { mw.loader.load(["mediawiki.page.startup"]); } Economic history of Iran From Wikipedia, the free encyclopedia Jump to: navigation, search History of Iran see also Kings of Persia · Timeline of Iran Antiquity Prehistory Proto-Elamite period 3200–2800 Elamite dynasty 2800–550 Kassites 16th–12th cent. Mannaeans 10th–7th cent. Median Empire 728–550 Achaemenid Empire 550–330 Seleucid Empire 330–150 Parthian Empire 248 BCE–226 CE Sassanid Empire 226–651 Middle Ages Islamic conquest 637–651 Umayyad Caliphate 661–750 Abbasid Caliphate 750–1258 Tahirid dynasty 821–873 Alavid dynasty 864–928 Sajid dynasty 889/890–929 Saffarid dynasty 861–1003 Samanid dynasty 875–999 Ziyarid dynasty 928–1043 Buyid dynasty 934–1062 Sallarid 942–979 Ma'munids 995-1017 Ghaznavid Empire 963–1187 Ghori dynasty 1149–1212 Seljuq dynasty 1037–1194 Khwarezmid dynasty 1077–1231 Ilkhanate 1256–1353 Muzaffarid dynasty 1314–1393 Chupanid dynasty 1337–1357 Sarbadars 1337–1376 Jalayerid dynasty 1339–1432 Timurid dynasty 1370–1506 Qara Qoyunlu 1407–1468 Aq Qoyunlu 1378–1508 Modern history Safavid dynasty 1501–1722/36 Hotaki dynasty 1722–1729 Afsharid dynasty 1736–1750 Zand dynasty 1750–1794 Qajar dynasty 1781–1925 Pahlavi dynasty 1925–1979 Interim Government 1979–1980 Islamic Republic since 1980 Contents 1 Pahlavi Era (1925-1979) 2 After the 1979 revolution 2.1 Review of Iran's successive economic plans (1991-2010) 3 See also 4 References 5 External links Pahlavi Era (1925-1979) Reza Shah Pahlavi (r. 1925–41) improved the country’s overall infrastructure, implemented educational reform, campaigned against foreign influence, reformed the legal system, and introduced modern industries. During this time, Iran experienced a period of social change, economic development, and relative political stability.1 Reza Shah visit Mustafa Kemal Atatürk in Turkey In the interwar period, modern industries were introduced. Whereas fewer than 20 modern industrial plants existed in 1925, by 1941 more than 800 new plants had been established, with the intention of reducing the country’s dependence on imports. The state encouraged industrialization by raising tariffs, financing modern industries, and imposing government monopolies. Changes in the legal system, tax structure, and trade policies attracted domestic financial resources and led to the emergence of a group of new, young entrepreneurs. The shah’s court became the biggest investor in the new industries. Primarily by confiscating real estate, the shah himself became the country’s richest man. Increased investment in mining, construction, and the manufacturing sector occurred, and infrastructure investment grew significantly. Iran had only 250 kilometers of railroads and 2,400 kilometers of gravel roads in 1925; by 1938 these totals had increased to 1,700 and 12,000 kilometers, respectively. Industrial growth was not balanced, however. Integration among sectors and industries was absent, and the new industries met only part of the growing domestic demand. Agriculture, from which 90 percent of the labor force made its living, did not benefit from economic reform. Furthermore, the expanding areas of the economy were not labor-intensive. Modern sectors (Caspian Sea fisheries, railroads, seaports, the oil industry, modern factories, and coal fields) absorbed a total of only about 170,000 workers, less than 4 percent of the labor force.1 The government managed the expansion of international trade by techniques such as the foreign-exchange controls imposed in 1936. Many new items were among the imported goods required by industry, the military, railroads, and other areas of infrastructure investment. Traditional agricultural and industrial export products were replaced by oil exports. Germany became Iran’s primary trading partner by 1940, accounting for 42 percent of its foreign trade; the United States was second, with 23 percent. The Soviet Union also was a major trading partner in this period. Despite many advances in domestic and foreign economic policy, however, Iran remained an exporter of raw materials and traditional goods and an importer of both consumer and capital goods in the years before World War II.1 Reza Shah Pahlavi, who abdicated in 1941, was succeeded by his son, Mohammad Reza Shah Pahlavi (r. 1941–79). No fundamental change occurred in the Iranian economy during World War II (1939–45) and the years immediately following. However, between 1954 and 1960 a rapid increase in oil revenues and sustained foreign aid led to greater investment and fast-paced economic growth, primarily in the government sector. Subsequently, inflation increased, the value of the national currency (the rial) depreciated, and a foreign-trade deficit developed. Economic policies implemented to combat these problems led to declines in the rates of nominal economic growth and per capita income by 1961.1 Abadan Refinery, built 1913. In response to these setbacks, Iran initiated its third economic development plan (1962–68) with an emphasis on industrialization. New economic policies significantly altered the role of the private sector. The expansion of private and public banks, as well as the establishment of two specialized banks, provided reliable credit markets for medium- and large-scale private manufacturing enterprises. Not limited to cheap credit, government programs also included a wide range of incentives to encourage investment in new industries by both Iranian and foreign businesses. Most new investment was a joint effort between either the public sector and foreign investors or private businesses and foreign corporations. Investment in roads, highways, dams, bridges, and seaports also increased. With government support, part of the agricultural sector also attracted significant investment. Many large-scale agricultural operations in meat, dairy products, and fruit production were established. Small-scale farmers, however, did not benefit from the new investment opportunities.1 Under the fourth and the fifth economic development plans (1968–73; 1973–78), the Iranian economy became increasingly open to imports and foreign investment. A combination of oil revenues, public spending, and foreign and domestic investments enlarged the middle class in major cities, particularly Tehran. In the wake of the spike in crude oil prices that followed the 1973 war pitting Egypt and Syria against Israel, the process of industrialization and consumption grew rapidly. Between 1973 and 1977, the specialized banks provided more than 200 billion rials to the manufacturing sector, and the increase in investment averaged 56 percent per year. A flood of imported goods and raw materials overwhelmed the capacity of seaports and warehouses. The military was also a beneficiary of the new economic and social conditions. Military personnel, modern artillery and equipment, and military training absorbed a major part of the budget.1 Shah's portrait at the 1000 Iranian rial bank note Between fiscal year 1964 and FY 1978, Iran’s gross national product grew at an annual rate of 13.2 percent at constant prices. The oil, gas, and construction industries expanded by almost 500 percent during this period, while the share of value-added manufacturing increased by 4 percent. Women’s participation in the labor force in urban areas increased. Large numbers of urban Iranian women, from varying social strata, joined the semiskilled and skilled labor forces. In addition, the number of women enrolling in higher education increased from 5,000 in FY 1967 to more than 74,000 in FY 1978.1 Economic growth, however, became increasingly dependent on oil revenues in the 1970s. By 1977, oil revenues had reached US$20 billion per year (79 percent of total government revenues). Other sectors of the economy and regions of the country did not experience a uniform pattern of growth during this period. Agriculture, traditional and semi-traditional industries, and the services sector did not thrive to the same extent as the “modern” state-sponsored manufacturing industries, which accounted for only 6 percent of industrial employment. As employment opportunities in rural areas and traditional industries decreased, public employment in urban areas increased. The proportion of self-employed Iranians remained stable.1 Accelerated development of the middle class was a major outcome of the 1960s and 1970s. Among this class were the new professional intelligentsia, called motekhassesin (experts). Their common denominator was the professional, cultural, or administrative expertise acquired through modern education. Nevertheless, the patterns of economic growth and regional development along with the political underdevelopment of the shah’s regime in areas such as civil institutions, human rights, and property rights limited opportunities for the majority of Iranians to develop fully their social and economic potential. Economic and social polarization minimized competition among businesses and limited development to the part of the economy concerned with the interests of dominant groups closely tied to the shah’s court and the state. Most Iranians were excluded from political and economic decision making.1 After the 1979 revolution See also: History of the Islamic Republic of Iran and Iran-Iraq war Iran: GDP, CPI and Current account data (1980-2010) According to the 1979 Iranian Constitution, it is the duty of the Islamic government to furnish all citizens with equal and appropriate opportunities, to provide them with work, and to satisfy their essential needs, so that the course of their progress may be assured.2 Iran's long-term objectives since the 1979 revolution have been economic independence, full employment, and a comfortable standard of living for citizens, but at the end of the 20th century, the country's economic future faces many obstacles. Iran's population more than doubled in a 20-year period, with an increasingly young population. Although a relatively large part of the population engages in farming, agricultural production has fallen consistently since the 1960s. By the late 1990s, Iran was a major food importer, and economic hardship in the countryside had driven vast numbers of people to migrate to cities. The rates of literacy and life expectancy in Iran are high for the region, but so is the unemployment rate, and inflation is in the range of 20% annually. Iran remains highly dependent on one major industry, the extraction of petroleum and natural gas for export, and the government faces increasing difficulty in providing opportunities for a younger, better educated workforce. Such lack of opportunities has led to a growing sense of frustration among lower- and middle-class Iranians. After the end of hostilities with Iraq in 1988, the government tried to develop the country's communication, transportation, manufacturing, health care, education and energy infrastructures (including its prospective nuclear power facilities) and has begun the process of integrating its communication and transportation infrastructure with that of neighboring states.3 It is estimated that Iran sustained a loss of $500 billion through the Iraq war.4 In 1996, the U.S. Government passed the Iran and Libya Sanctions Act (ILSA) which prohibits U.S. (and non-U.S. companies) from investing and trading with Iran for more than $20 million annually,5 with the exception, since 2000, for items like pharmaceuticals, medical equipment. Review of Iran's successive economic plans (1991-2010) See also: Government of Iran, Parliament of Iran, Economy of Iran, Central Bank of Iran, Demography of Iran, and Education in Iran Plans (main data sources: Iranian Parliament & Ministry of Commerce)67 1991-2001 (achieved) 2005-10 (target) 2009-10 (achieved) Number of articles to be implemented in the plan N/A 290 117 Economic growth 3.9% on average 8% on average 6.3% on average (2006-10) Liquidity growth 27.3% on average <20% on average 33% on average Inflation 23% on average <10% on average 16% on average Unemployment rate N/A 11% by 2010 12% on average (2005-10) Jobs creation per year by 2010 N/A 848,000 jobs/year 725,000 jobs/year Labor productivity growth 1.3% on average 3.5% N/A Investment growth 4.3% on average 12.2% N/A Population growth 1.5% on average 1.4% N/A Non-oil export growth 5.6% on average 10.7% N/A Technology access index N/A 0.45 0.26 Ratio of research expenditures to GDP 0.4% (2001)8 2.5% 0.87% Ratio of high-tech exports to total non-oil exports N/A 6 2 New oil and gas fields discovered (2005-10) N/A N/A 19 new oilfields and eight new gas reserves9 Ratio of the expenditures of top 10% to bottom 10% households 19.4 (2001) N/A 14 Gini coefficient 0.43 (2001) N/A 0.38 according to government Social welfare index 423 (2001) N/A 800 Population below the poverty line (the middle 50%) 15% (2001) N/A 7% according to government Penetration rate - mobile users N/A 50%10 60% (2009)11 Fixed telephone lines N/A 36 million fixed lines10 24.8 million (2008)12 Internet users N/A 30 million users10 23 million (2008)12 Iran's GDP and population growth (from 1967 until 2007) Iran's total debt service as percent of exports of goods services and income increased sixfold between 1990 and 1997 Between March 2001 and April 2003, the TSE index (Tepix) bucked the trend by going up nearly 80%13 Between 2002 and 2006, the rate of inflation in Iran has been fluctuating between 12 and 16%.14 Iran's trade balance (2000-2007) US dollar/Iranian rial historical exchange rates (2003-2009) Iran's population reached 70 million in 2006. More than two-thirds of the Iranians are under the age of 30, and the literacy rate stands above 80%.15 Iran is among the first five countries which have had a growth rate of over 20% and the highest level of development in telecommunication.1617 Foreign Direct Investment in Iran (2000-07) Iranian military expenditures (1989-2007) Energy consumption in Iran is 6.5 times that of global average.18 Iranian Government budget (1999-2004) See also Iran portal Economy of Iran Privatization in Iran Iranian Economic Reform Plan Demography of Iran Education in Iran Science and technology in Iran International rankings of Iran References ^ a b c d e f g h i http://lcweb2.loc.gov/frd/cs/pdf/CS_Iran.pdf  This article incorporates text from this source, which is in the public domain. ^ University of Bern; Iranian Constitution summary Retrieved November 30, 2009dead link ^ "Iranian Economy in Six Snapshots". Payam-e Emruz; Economic, Social, Cultural (Monthly). 2001-02-23. Archived from the original on 2007-09-27. http://web.archive.org/web/20070927023440/http://www.irvl.net/six_snapshots.htm. Retrieved 2007-07-17.  ^ MSN Encarta: Iran-Iraq War Retrieved January 29, 2009. Archived 2009-10-31. ^ [1]. Retrieved 23 January 2008. ^ http://www.turquoisepartners.com/iraninvestment/IIM-Feb10.pdf ^ http://www.irantradelaw.com/wp-content/uploads/2010/03/Irans-Foreign-Trade-Regime-Report.pdf ^ http://www.ams.ac.ir/AIM/0141/malekzadeh0141.html ^ http://www.iran-daily.com/1389/9/2/MainPaper/3832/Page/4/Index.htm# ^ a b c http://www.atiehbahar.com/Resource.aspx?n=1000014 ^ http://www.nitc.co.ir/iran-daily/1387/3317/html/economy.htm ^ a b https://www.cia.gov/library/publications/the-world-factbook/geos/ir.html#Econ ^ The Tehran Stock Exchange: A Maverick Performer?, Middle East Economic Survey, May 23, 2005 ^ "Iran Inflation Rate". index Mondi. http://www.indexmundi.com/iran/inflation_rate_(consumer_prices).html.  ^ UNDP.org Table H ^ Burkhart, Grey, ed. (March 1998), "Iran", National Security and the Internet in the Persian Gulf Region, Georgetown University, http://web.archive.org/web/20070703041209/http://www.georgetown.edu/research/arabtech/pgi98-4.html, retrieved 2009-07-15  ^ "Telecoms And Technology Forecast for Iran", Telecoms and technology, Economist Intelligence Unit, 18 June 2008  ^ Iran daily:Energy Wastage Criticized. Retrieved April 15, 2009.dead link External links Economic History of Iran (Including in ancient times) - Encyclopedia Iranica Iran's Foreign Trade Regime (Many historical data and statistics about Iran's economy) - Ministry of Commerce (Iran) History of Banking in Iran Iran's Third Development Plan: an Appraisal by Dr. Jahangir Amuzegar Where Did Iran's Islamic Economy Come From and Where Did it Go? by Dr. Sohrab Behdad v · d · eEconomic histories by country Current nations/regions Africa · Argentina · Australia · Brazil · Cambodia · Canada · Chile · China · Europe · France · Germany · Greece · India · Iran · Ireland · Japan · Mexico · Morocco · Nicaragua · Nigeria · Pakistan · Peru · Portugal · Scotland · Somalia · South Africa · Spain · Taiwan · Turkey · United Kingdom · United States · Vietnam · Zimbabwe Former industrialized economies Czechoslovakia · East Germany · Mongolian People's Republic · Serbia and Montenegro · Soviet Union · Yugoslavia Historical economies Confederate States of America · Empire of Brazil · Byzantine Empire · Dutch Republic · Ancient Greece · Ireland · Ottoman Empire · Roman Empire · Scotland in the High Middle Ages  · England in the Middle Ages · Ancient Tamil country · Iroquois